{01108843.DOCX v:1}
2022 ANNUAL REPORT
TALLGRASS METROPOLITAN DISTRICT
As required by Section 32-1-207(3)(c), C.R.S., the following report of the activities of Tallgrass
Metropolitan District (the
“District”
) from January 1, 2022 to December 31, 2022 is hereby
submitted.
A.
Boundary changes made:
No boundary changes were made or proposed during
2022.
B.
Intergovernmental Agreements entered into or terminated: No intergovernmental
agreements were entered into or terminated during 2022.
C.
Access information to obtain a copy of rules and regulations adopted:
The
District has not adopted any rules and regulations as of December 31, 2022.
In the event the District adopts such in the future, they may be accessed at the
offices of Centennial Consulting Group, 2619 Canton Court, Suite A, Fort
Collins, Colorado 80525, or on the District’s website:
https://ccgcolorado.com/tallgrass/.
D.
Summary of litigation involving the District’s public improvements: The District
was not involved in any litigation during 2022.
E.
Status of the District’s construction of public improvements: The District has
completed the construction of its public improvements.
F.
Conveyances or dedications of facilities or improvements, constructed by the
District, to Arapahoe County: No facilities or improvements constructed by the
District were conveyed or dedicated to the County during 2022.
G.
Final assessed valuation of the District for the reporting year: $26,799,513
H.
Current year’s budget: A copy of the District’s 2023 budget is attached hereto as
Exhibit A
.
I.
Audited financial statements for the reporting year (or application for exemption
from audit): A copy of the 2022 Audit is attached hereto as
Exhibit B
.
J.
Notice of any uncured events of default by the District, which continue beyond a
ninety (90) day period, under any debt instrument: To our knowledge, there are no
uncured events of default by the District which continue beyond a ninety (90) day
period.
K.
Any inability of the District to pay its obligations as they come due, in accordance
with the terms of such obligations, which continues beyond a ninety (90) day
period: To our knowledge, the District has been able to pay its obligations as they
come due
{01108843.DOCX v:1}
EXHIBIT A
2023 BUDGET
RESOLUTION NO. 2022-12-03
RESOLUTION TO ADOPT 2023 BUDGET AND APPROPRIATE SUMS OF MONEY
RESOLUTION OF THE BOARD OF DIRECTORS OF
TALLGRASS METROPOLITAN DISTRICT, ARAPAHOE COUNTY, COLORADO,
PURSUANT TO SECTION 29-1-108, C.R.S., SUMMARIZING EXPENDITURES AND
REVENUES FOR EACH FUND, ADOPTING A BUDGET AND APPROPRIATING
SUMS OF MONEY FOR THE BUDGET YEAR 2023
A.
The Board of Directors of Tallgrass Metropolitan District (the “
District
”) has
appointed Centennial Consulting Group, LLC, to prepare and submit a proposed budget to said
governing body at the proper time.
B.
Centennial Consulting Group, LLC, has submitted a proposed budget to this
governing body on October 15, 2022 for its consideration.
C.
Upon due and proper notice, published or posted in accordance with the law, said
proposed budget was open for inspection by the public at a designated place, a public hearing
was held on December 7, 2022, and interested taxpayers were given the opportunity to file or
register any objections to said proposed budget.
D.
The budget has been prepared to comply with all terms, limitations and
exemptions, including, but not limited to, reserve transfers and expenditure exemptions, under
Article X, Section 20 of the Colorado Constitution (“
TABOR
”) and other laws or obligations
which are applicable to or binding upon the District.
E.
Whatever increases may have been made in the expenditures, like increases were
added to the revenues so that the budget remains in balance, as required by law.
F.
The Board of Directors has made provision therein for revenues in an amount
equal to or greater than the total proposed expenditures as set forth in said budget.
G.
It is not only required by law, but also necessary to appropriate the revenues
provided in the budget to and for the purposes described below, thereby establishing a limitation
on expenditures for the operations of the District.
NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF
TALLGRASS METROPOLITAN DISTRICT, ARAPAHOE COUNTY, COLORADO:
1.
The budget, as submitted, amended, and summarized by fund, is hereby approved
and adopted as the budget of the District for the year stated above.
2.
The budget is hereby approved and adopted, shall be certified by the Secretary of
the District to all appropriate agencies and is made a part of the public records of the District.
2
3.
The sums set forth as the total expenditures of each fund in the budget attached
hereto as
Exhibit A
and incorporated herein by reference are hereby appropriated from the
revenues of each fund, within each fund, for the purposes stated.
[SIGNATURE PAGE FOLLOWS]
3
[SIGNATURE PAGE TO RESOLUTION TO ADOPT BUDGET AND
APPROPRIATE SUMS OF MONEY]
RESOLUTION APPROVED AND ADOPTED on December 7, 2022.
TALLGRASS METROPOLITAN
DISTRICT
By:
Kathleen Chandler
, President
Attest:
By:
Chad
Stowe,
Secretary
KAtlrlttn,
cluwJw:
Kathleen
Chandler
(Jan 27, 2023 08:15
MST)
Chad
Stowe
(Jan
26
,
2023
15
:
20
MST)
A-1
EXHIBIT A
Budget
I, Chad Stowe, hereby certify that I am the duly appointed Secretary of the Tallgrass
Metropolitan District, and that the foregoing is a true and correct copy of the budget for the
budget year 2023, duly adopted at a meeting of the Board of Directors of the Tallgrass
Metropolitan District held on December 7, 2022.
Chad Stowe, Secretary
Chad
Stowe
(Jan
26, 202315:20
MST)
TALLGRASS METROPOLITAN DISTRICT
2023 Budget Message
Introduction
The budget reflects the projected spending plan for the 2023 fiscal year based on available
revenues.
This budget provides for the annual debt service on the District’s Debt, as well as the
expenditures for general operation of the District.
Operating taxes are levied on $26,799,513 of assessed property and $3,269,521 of assessed
property is exempt from operating levies. The D
istrict’s mill levy
increased to 34.500 mills for
taxes collected in the 2023 fiscal year, with 32.500 mills dedicated to the Debt Service Fund and
2.000 mills dedicated to the General Fund.
The District was formed in 2002 for the purpose of providing design, financing, acquisition, and
construction of certain infrastructure improvements, including water, streets, sanitary sewer, park
and recreation, and traffic and safety controls. When appropriate, these improvements have been
dedicated to Arapahoe County or such other entities for the use and benefit of the District
taxpayers and service users.
Budgetary Basis of Accounting
The District uses fund accounting principles to budget and report on the financial position and
results of operations. Fund accounting is designed to demonstrate legal compliance and to aid
financial management by segregating transactions related to certain governmental functions. The
total District budget comprises the various funds.
All of the District’s funds are considered
Governmental Funds and are reported using the current financial resources and the modified
accrual basis of accounting. Revenues are recognized when they are measurable and available.
Revenues are considered available when they are collectible within the current period. For this
purpose, the District considers revenues to be available if they are collected within 60 days of the
end of the current fiscal period. Expenditures, other than interest on long-term obligations, are
recorded when the liability is incurred, or the long-term obligation is paid.
Fund Summaries
The General Fund is used to account for revenue sources traditionally associated with
government, such as property taxes and specific ownership tax. Expenditures include District
administration, legal services, and other expenses related to statutory operations of a local
government.
The Debt Service Fund is used to account for property taxes and other revenues dedicated to pay
the fiscal year’s debt
expense, which includes principal payments, interest payments, and
administrative costs associated with debt issues. See the debt summary included with the budget.
Emergency Reserve
As required by the TABOR amendment to the Colorado Constitution, the District has provided
for an Emergency Reserve in the amount of 3% of the total fiscal year expenditures in the
General Fund.
TALLGRASS METROPOLITAN DISTRICT
2023 Budget Message
Debt Summary
Tallgrass Metropolitan District
Tax-Exempt Note Series 2016, Issued July 7, 2016
Year
Principal
Interest
2023
600,000
345,465
2024
630,000
330,550
2025
650,000
313,040
2026
11,325,000
295,095
Total
13,205,000
1,284,150
2021
Actual
2022
Budget
2022
Estimated
Actual
2023 Budget
Beginning Fund Balance
244,826
244,826
252,387
252,387
Income
Interest Revenue
150
750
5,409
3,786
Property Taxes
53,177
68,577
68,577
53,599
Specific Ownership Taxes
3,665
4,115
4,329
3,216
Tax Related Interest
20
-
26
-
Senior/Veterans Tax
-
-
-
-
Total Income
57,012
73,442
78,341
60,601
Expense
General and Administration
Management & Accounting Services
12,600
13,800
13,800
15,360
Legal
25,975
15,000
10,000
15,000
Audit/Tax Prep
5,850
8,500
7,818
8,500
Election
-
15,000
2,380
15,000
Insurance
3,088
3,242
3,088
3,242
Treasurers Fees
798
1,029
1,029
804
Office
186
100
520
500
Dues and Compliance
308
369
322
338
Other Administrative
-
-
-
Directors Pay
600
900
900
900
Payroll Expenses
46
69
69
69
Other
Contingency
-
15,433
-
6,500
Total Expenses
49,451
73,442
39,926
66,213
Excess Revenues (Expenses)
7,561
-
38,415
(5,612)
Ending Fund Balance
252,387
244,826
290,802
246,775
Modified Accrual Basis
General Fund
Tallgrass Metropolitan District
2023 Budget
Modified Accrual Basis
Tallgrass Metropolitan District
2023 Budget
2021
Actual
2022
Budget
2022
Estimated
Actual
2023 Budget
Beginning Fund Balance
531,435
542,917
543,114
543,114
Income
Interest Revenue
314
5,000
14,210
5,431
Property Tax
888,479
923,659
923,659
977,244
Specific Ownership Tax
61,233
55,420
58,312
58,635
Tax Related Interest
348
-
343
-
Total Income
950,374
984,079
996,524
1,035,879
Expense
Legal
-
3,000
-
-
Treasurers Fees
13,332
13,855
13,860
14,659
Bank Fees
113
50
-
100
Principal - Notes
550,000
580,000
580,000
600,000
Extra Principal - Notes
-
-
-
100,000
Interest - Notes
375,250
360,752
360,752
345,470
Contingency
-
-
-
-
Total Expenses
938,695
957,657
954,612
1,060,229
Excess Revenues (Expenses)
11,679
26,422
41,912
(24,350)
Ending Fund Balance
543,114
569,339
585,026
518,764
Assessed Valuation
26,588,708
27,430,629
26,799,513
Operating Levy
2.000
2.500
2.000
Debt Levy
30.000
30.000
32.500
Assessed Valuation - Bonds Only
3,027,262
3,357,994
3,269,521
Mill Levy
30.000
30.000
32.500
Assessed Valuations
Debt Service Fund
2021
Actual
2022
Budget
2022
Estimated
Actual
2023 Budget
Beginning Fund Balance
244,826
244,826
252,387
252,387
Income
Interest Revenue
150
750
5,409
3,786
Property Taxes
53,177
68,577
68,577
53,599
Specific Ownership Taxes
3,665
4,115
4,329
3,216
Tax Related Interest
20
-
26
-
Senior/Veterans Tax
-
-
-
-
Total Income
57,012
73,442
78,341
60,601
Expense
General and Administration
Management & Accounting Services
12,600
13,800
13,800
15,360
Legal
25,975
15,000
10,000
15,000
Audit/Tax Prep
5,850
8,500
7,818
8,500
Election
-
15,000
2,380
15,000
Insurance
3,088
3,242
3,088
3,242
Treasurers Fees
798
1,029
1,029
804
Office
186
100
520
500
Dues and Compliance
308
369
322
338
Other Administrative
-
-
-
Directors Pay
600
900
900
900
Payroll Expenses
46
69
69
69
Other
Contingency
-
15,433
-
6,500
Total Expenses
49,451
73,442
39,926
66,213
Excess Revenues (Expenses)
7,561
-
38,415
(5,612)
Ending Fund Balance
252,387
244,826
290,802
246,775
Modified Accrual Basis
General Fund
Tallgrass Metropolitan District
2023 Budget
Modified Accrual Basis
Tallgrass Metropolitan District
2023 Budget
2021
Actual
2022
Budget
2022
Estimated
Actual
2023 Budget
Beginning Fund Balance
531,435
542,917
543,114
543,114
Income
Interest Revenue
314
5,000
14,210
5,431
Property Tax
888,479
923,659
923,659
977,244
Specific Ownership Tax
61,233
55,420
58,312
58,635
Tax Related Interest
348
-
343
-
Total Income
950,374
984,079
996,524
1,035,879
Expense
Legal
-
3,000
-
-
Treasurers Fees
13,332
13,855
13,860
14,659
Bank Fees
113
50
-
100
Principal - Notes
550,000
580,000
580,000
600,000
Extra Principal - Notes
-
-
-
100,000
Interest - Notes
375,250
360,752
360,752
345,470
Contingency
-
-
-
-
Total Expenses
938,695
957,657
954,612
1,060,229
Excess Revenues (Expenses)
11,679
26,422
41,912
(24,350)
Ending Fund Balance
543,114
569,339
585,026
518,764
Assessed Valuation
26,588,708
27,430,629
26,799,513
Operating Levy
2.000
2.500
2.000
Debt Levy
30.000
30.000
32.500
Assessed Valuation - Bonds Only
3,027,262
3,357,994
3,269,521
Mill Levy
30.000
30.000
32.500
Assessed Valuations
Debt Service Fund
{01108843.DOCX v:1}
EXHIBIT B
2022 AUDIT
Tallgrass Metropolitan District
FINANCIAL STATEMENTS AND
REPORT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
December 31, 2022
Table of Contents
Page
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
3
BASIC FINANCIAL STATEMENTS
GOVERNMENTAL FUNDS BALANCE SHEET/
STATEMENT OF NET POSITION
6
STATEMENT OF GOVERNMENTAL FUNDS REVENUE,
EXPENDITURES, AND CHANGE IN FUND BALANCE/
STATEMENT OF ACTIVITIES
7
STATEMENT OF REVENUE, EXPENDITURES, AND CHANGE IN
FUND BALANCE – BUDGET AND ACTUAL – GENERAL FUND
8
NOTES TO FINANCIAL STATEMENTS
9
SUPPLEMENTARY INFORMATION
SCHEDULE OF REVENUE, EXPENDITURES, AND CHANGE IN
FUND BALANCE – BUDGET AND ACTUAL – DEBT SERVICE FUND
18
1745 Shea Center Drive, Suite 400
1660 Marlands Lane
Highlands Ranch, CO 80129
Minocqua, WI 54548
720/344-4938
715/301-9782
206/888-2716 – fax
www.marcjamescpa.com
REPORT OF INDEPENDENT CERTIFIED
PUBLIC ACCOUNTANTS
Board of Directors
Tallgrass Metropolitan District
Arapahoe County, Colorado
We have audited the financial statements of governmental activities and the governmental funds of the
Tallgrass Metropolitan District (the “District), as of and for the year ended December 31, 2022 and the
related notes to the financial statements, which collectively comprise the District’s basic financial
statements as listed in the table of contents.
In our opinion, the accompanying financial statements present fairly, in all material respects, the
respective financial position of the governmental activities and the general fund of the Tallgrass
Metropolitan District as of December 31, 2022, and the respective changes in financial position for the
year then ended in accordance with accounting principles generally accepted in the United States of
America.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in the United States of
America (“US GAAS”). Our responsibilities under those standards are further described in the
Auditor’s
Responsibilities for the Audit of the Financial Statements
section of our report. We are required to be
independent of the District and to meet our other ethical responsibilities, in accordance with the relevant
ethical requirements relating to our audit. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our audit opinion.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in
accordance with accounting principles generally accepted in the United States of America, and for the
design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or
error.
In preparing the financial statements, management is required to evaluate whether there are conditions or
events, considered in the aggregate, that raise substantial doubt about the District’s ability to continue as
a going concern within one year after the date that the financial statements are issued or available to be
issued
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance
and therefore is not a guarantee that an audit conducted in accordance with US GAAS will always detect
a material misstatement when it exists. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal control. Misstatements are considered material
if, individually or in the
aggregate, they could reasonably be expected to influence the economic
decisions of users made on the basis of these financial statements.
Auditor’s Responsibilities for the Audit of the Financial Statements – continued
In performing an audit in accordance with US GAAS, we:
Exercise professional judgment and maintain professional skepticism throughout the audit,
Identify and assess the risks of material misstatement of the financial statements, whether
due to fraud or error, and design and perform audit procedures responsive to those risks.
Such procedures include examining, on a test basis, evidence regarding the amounts and
disclosures in the financial statements,
Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the District’s internal control. Accordingly, no such opinion
is expressed,
Evaluate the appropriateness of accounting policies used and the reasonableness of
significant accounting estimates made by management, as well as evaluate the overall
presentation of the financial statements,
Conclude whether, in our judgment, there are conditions or events, considered in the
aggregate, that raise substantial doubt about the District’s ability to continue as a going
concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters, the
planned scope and timing of the audit, significant audit findings, and certain internal control–related matters that
we identified during the audit.
Other Matters
Required Supplementary Information
The Board of Directors have opted to omit the Management’s Discussion and Analysis information that
accounting principles generally accepted in the United States of America require to be presented to supplement
the basic financial statements.
Such omitted information, although not part of the basic financial statements, is
required by the Government Accounting Standards Board, who considers it to be an essential part of the financial
reporting for placing the basic financial statements in an appropriate operational, economic, or historical context.
Our opinion on the basic financial statements is not affected by this omitted information.
Supplementary Information
Our audit was conducted with the purpose of forming an opinion on the basic financial statements of the Tallgrass
Metropolitan District taken as a whole.
The supplementary information on page 18 is presented for purposes of
additional analysis and is not a required part of the basic financial statements.
Such information has been
subjected to our auditing procedures applied in the audit of the financial statements, and, in our opinion, is fairly
stated in all material respects in relation to the basic financial statements taken as a whole.
Marc, James & Associates PC
Highlands Ranch, CO
September 18, 2023
BASIC FINANCIAL STATEMENTS
The accompanying notes are an integral part of these statements
-6-
Debt
Statement
General
Service
of Net
Fund
Fund
Total
Adjustments
Position
ASSETS
Cash and cash equivalents
$
$
$
-
$
$
Property taxes receivable
-
Due from County Treasurer
-
Due from other funds
-
(5,889
) -
Prepaid expenses
-
-
Total assets
$
$
$
(5,889)
LIABILITIES
Accounts payable
$
-
$
$
-
Accrued interest payable
-
-
-
29,340
Due to other funds
-
(5,889)
-
Long-term liabilities
Due within one year
-
-
-
600,000
Due after one year
-
-
-
12,505,000
Total liabilities
-
13,128,451
DEFERRED INFLOWS OF RESOURCES
Property taxes
-
1,030,842
FUND BALANCE/NET POSITION
FUND BALANCE
Nonspendable
495
-
495
(495)
-
Restricted
(586,109)
-
Unassigned
-
(293,428)
-
Total fund balance
(880,032)
-
Total liabilities, deferred inflows of
resources and fund balance
$
$
$
NET POSITION
Restricted
1,100
Debt service
585,009
Unrestricted (deficit)
(12,840,417)
(12,840,417 )
Total net position
(12,254,308)
$
(12,254,308 )
$
Tallgrass Metropolitan District
GOVERNMENTAL FUNDS BALANCE SHEET/STATEMENT OF NET POSITION
December 31, 2022
Governmental Funds
The accompanying notes are an integral part of these statements
-7-
Debt
Statement
General
Service
of
Fund
Fund
Total
Adjustments
Activities
Expenditures/Expenses
Operating
Audit
7,818
$
-
$
7,818
$
-
$
$
Dues and fees
-
-
Directors' fees
-
-
Election
-
Insurance
-
-
Legal
-
-
Office
-
-
Management and accounting
-
-
Storage
-
Treasurer's fee
-
Debt service
Principal payments
-
(580,000)
-
Interest expense
-
360,752
360,752
(1,298)
Total expenditures/expenses
(581,298)
General Revenue
Property taxes
-
Specific ownership taxes
-
Interest
-
Total general revenue
-
Change in Fund Balance
(84,531)
-
Change in Net Position
-
-
-
665,829
Fund balance/net position
Beginning of the year
(13,715,638)
(12,920,137 )
End of the year
$
$
$
(13,134,340)
$
(12,254,308 )
$
Tallgrass Metropolitan District
STATEMENT OF GOVERNMENTAL FUNDS REVENUE, EXPENDITURES AND
For the Year ended December 31, 2022
CHANGE IN FUND BALANCE/STATEMENT OF ACTIVITIES
Governmental Funds
The accompanying notes are an integral part of these statements
-8-
Original
and Final
Budget
Actual
Variance
Revenue
Property taxes
68,577
$
68,577
$
-
$
Specific ownership taxes
4,115
4,329
214
Interest
750
5,439
4,689
Total revenue
73,442
78,345
4,903
Expenditures
Operating
Audit
8,500
7,818
682
Contingency
15,433
-
15,433
Directors' fees
900
300
600
Dues and fees
369
322
47
Elections
15,000
2,380
12,620
Insurance
3,242
3,088
154
Legal
15,000
6,430
8,570
Management and accounting
13,800
13,800
-
Office
169
212
(43)
Storage
-
330
(330)
Treasurer's fee
1,029
1,029
-
Total expenditures
73,442
35,709
37,733
Change in Fund Balance
-
$
42,636
42,636
$
Fund Balance
Beginning of the year
252,387
End of the year
295,023
$
Tallgrass Metropolitan District
STATEMENT OF REVENUE, EXPENDITURES AND CHANGE IN FUND BALANCE
BUDGET AND ACTUAL - GENERAL FUND
For the Year ended December 31, 2022
Tallgrass Metropolitan District
NOTES TO FINANCIAL STATEMENTS
December 31, 2022
-9-
NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting policies of the Tallgrass Metropolitan District (the “District”) conform to the accounting
principles generally accepted in the United States of America (“US GAAP”) as applicable to governmental
entities.
The following is a summary of the more significant policies consistently applied in the
preparation of the basic financial statements of the District.
1. Reporting Entity
The District was established pursuant to the provisions of Title 32 of the Colorado Revised Statutes,
Colorado Special District Act in December 2002, as a quasi-municipal corporation and is governed by a
five-member Board of Directors.
The District was established to provide for the acquisition, construction, installation and completion of
improvements within the District.
The District’s service area is located in Arapahoe County, Colorado.
All operation and administrative functions of the District are performed by a contract third party.
As required by US GAAP, these financial statements present the activities of the District, which is
legally separate and financially independent of other state and local government entities.
The District
has no component units as defined by Governmental Accounting Standards Board (“GASB”),
Statement No. 14,
The Reporting Entity
and GASB No. 39,
Determining Whether Certain Organizations
are Component Units
.
2. Measurement Focus and Financial Reporting Framework
Government-wide Financial Statements
The government–wide financial statements, the Statement of Net Position and the Statement of
Activities, report information on the
governmental-type activities
of the District, which rely to a significant
extent on property and specific ownership taxes.
The Statement of Activities demonstrates the degree
to which expenses of the
governmental-type activities
are supported by property and specific ownership
taxes.
The government-wide financial statements are prepared using the accrual basis of accounting.
Governmental Fund Financial Statements
The governmental fund financial statements are prepared using the current financial resources
measurement focus and the modified accrual basis of accounting.
Revenues are recognized as soon
as they are both measurable and available.
Revenues are considered to be available if the revenues
are collectible within the current period or soon thereafter to pay liabilities of the current period.
For that
purpose, the District considers revenues to be available if they are expected to be collected within 60
days of the end of the current fiscal period.
Tallgrass Metropolitan District
NOTES TO FINANCIAL STATEMENTS
December 31, 2022
-10-
NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -
continued
Measurement Focus and Financial Reporting Framework - continued
Governmental Funds
The District maintains two individual governmental funds.
The governmental funds information is
presented separately in the governmental funds balance sheet and in the governmental funds
statement of revenues, expenditures, and changes in fund balance for the General Fund and the
The
G
e
neral Fund
is the District’s primary operating fund.
It accounts for all financial resources of
the general government, except for those required to be accounted for in another fund.
The
accounts for the resources accumulated and payments made for principal
and interest on long-term debt of governmental funds.
3.
Cash and Cash Equivalents
The District considers cash and cash equivalents to include cash on hand, demand deposits, savings
accounts and money market accounts.
4.
Fair Value of Financial Instruments
The District’s financial instruments include cash and cash equivalents, property taxes receivable,
accounts payable, accrued liabilities and deferred inflows of resources.
The District estimates that
the fair value of these financial instruments as of December 31, 2022, do not differ materially from the
aggregate carrying values used in the accompanying financial statements.
The carrying amount of
these financial instruments approximates the fair value due to the short maturity of these financial
instruments.
5.
Use of Estimates
The preparation of financial statements in conformity with US GAAP may involve the use of
management estimates that could affect the reported amounts of assets and liabilities as of the date
of the financial statements, and the reported amounts of revenue and expenses during the reporting
period.
These estimates would be based upon management’s best judgment, after considering past
events and assumptions about future events.
Actual results could differ from those estimates.
6.
Property Taxes Receivable
Property taxes are levied on December 15 of each year, and attach as an enforceable lien on subject
property as of January 1 of the following year.
The property taxes are payable in full on April 30 or if
paid in two installments, due on February 28 and June 15.
Property taxes are considered to be
delinquent as of August 1.
Arapahoe County bills and collects the property taxes on behalf of the
District and remits the collections, less the Treasurer’s fees, to the District on a monthly basis. As of
December 31, the District has recorded the levied property taxes and the related deferred inflow of
resources.
As the property taxes result in an enforceable lien on the subject property, in the event the property
taxes are not paid, the subject property will be sold at public auction to collect the delinquent property
taxes.
Accordingly, no provision is deemed necessary for uncollected property taxes.
Tallgrass Metropolitan District
NOTES TO FINANCIAL STATEMENTS
December 31, 2022
-11-
NOTE B – BUDGET INFORMATION
The District’s annual budget is prepared on a Non-GAAP basis for the District’s General Fund and Debt
Service Fund.
An annual appropriated budget is adopted at the total fund expenditure level and the
annual appropriations lapse at the end of the District’s fiscal year.
The District conforms to the following procedures, in accordance with the State of Colorado Revised
Statutes, in the establishment of the budgetary information reflected in the accompanying financial
statements.
Prior to October 15, the District’s Manager submits a proposed operating budget for the subsequent fiscal
year to the District’s Board of Directors.
The Board of Directors may change the proposed budget prior to
the publication of the notice of budget.
After the submission, a notice of the proposed budget is
published.
The operating budget includes proposed expenditures and the means of financing the
expenditures.
A public hearing is held at a regular District Board of Directors’ meeting to allow public input on the
proposed operating budget.
On or before December 15, the operating budget is adopted by the Board of Directors through passage of
a budget resolution.
Upon adoption, the District’s Treasurer is authorized by the Board of Directors to
transfer the budgeted amounts within the function and objects of the Fund(s).
The District’s Board of
Directors must approve revisions that change the total expenditures of the Fund(s).
Appropriations are
controlled and the budget can be only amended in accordance with the State of Colorado Revised
Statutes that allows the District to amend the budget and adopt a supplemental appropriation in certain
circumstances.
The State of Colorado Revised Statutes requires balanced budgets.
For 2022, the budgeted revenue exceeded the budgeted expenditures in the Debt Service Fund by
$26,422.
It is anticipated that excess revenues will be used in subsequent years.
NOTE C – CASH AND INVESTMENTS
The Colorado Public Deposit Protection Act (“PDPA”) requires that all units of local government deposit
cash in eligible public depositories.
State regulators determine the eligibility.
Amounts on deposit in
excess of the Federal Deposit Insurance Corporation (“FDIC”) insurance levels must be collateralized.
The eligible collateral is determined by the PDPA.
The PDPA allows institutions to create a single
collateral pool for all public funds.
The pool is to be maintained by another institution, or held in trust for
all uninsured public deposits.
The market value of the collateral must be equal to 102% of the aggregate
uninsured public deposits.
As of December 31, 2022, all of the District’s deposits were either insured by the FDIC or held in eligible
depositories.
Tallgrass Metropolitan District
NOTES TO FINANCIAL STATEMENTS
December 31, 2022
-12-
NOTE C – CASH AND INVESTMENTS –
continued
At December 31, 2022, the District had $854,180 invested in the Colorado Local Government Liquid Trust
(“COLOTRUST”), an investment vehicle established for local government entities in Colorado to pool
surplus funds. The State Securities Commissioner administers and enforces all State statutes governing
the Trust. The Trust operates similarly to a money market fund and each share is equal in value to $1.00.
The Trust offers shares in two portfolios, COLOTRUST PRIME and COLOTRUST PLUS+. Both portfolios
may invest in U.S. Treasury securities and repurchase agreements collateralized by U.S. Treasury
securities. COLOTRUST PLUS+ may also invest in certain obligations of U.S. government agencies,
highest rated commercial paper and repurchase agreements collateralized by certain obligations of the
U.S. government agencies. The District’s investments are in the COLOTRUST PLUS+ portfolio.
COLOTRUST is rated AAAm by Standard & Poor’s.
NOTE D – LONG -TERM DEBT
Note Payable – PNC Bank
In 2016, the District entered into a Loan Agreement with PNC Bank (the "Lender") and issued a Note
Payable in the amount of $16,835,000 the proceeds of which were used to refund the District's previously
issued Series 2007 Bonds, and to fund the issuance and closing costs associated with the issuance of
the Note Payable.
The Note Payable has a final maturity date of December 1, 2026 and requires annual principal payments
beginning on December 1, 2016.
In addition, the Note Payable may be prepaid in whole or in part only in
accordance with the terms of the Loan Agreement.
Specifically, on December 1, 2017, and on any date
thereafter, the District may prepay the principal of the Note Payable in amounts up to $200,000 annually,
at a price of par plus any accrued interest.
On December 1, 2023, and on any date thereafter, the District
may prepay the principal of the Note Payable in whole or in any part, at a price of par plus any accrued
interest, without prepayment fees, premiums or penalties.
The Note Payable requires semi-annual interest payments on June 1 and December 1 at a rate of 2.6%.
Interest is to be calculated on the basis of a 360-day year and the actual number of days elapsed in the
applicable period.
The Note Payable is to be paid solely from Pledged Revenue as defined in the Loan Agreement.
In accordance with the terms of the Loan Agreement, the Lender created and established a separate
Loan Payment Fund account into which the District is required to transfer and deposit all amounts
comprising the Pledged Revenue and from which solely the Lender shall pay the principal and interest.
First, to the payment of interest due and, second, to the extent that money is remaining after payment of
interest, to the payment of the principal of the Note Payable.
Tallgrass Metropolitan District
NOTES TO FINANCIAL STATEMENTS
December 31, 2022
-13-
NOTE D – LONG -TERM DEBT -
continued
Note Payable – PNC Bank - continued
The following is an analysis of changes in the long-term debt as of December 31, 2022:
Balance
December 31,
2021
Borrowings
Payments
Balance
December 31,
2022
Note Payable
$
13,685,000
$
-
$
580,000
13,105,000
Due in one year
(600,000)
Due in more than one
year
$
12,505,000
The following is a summary of the future annual principal and interest requirements for the Note Payable
as of December 31, 2022:
Year(s) Ended
Principal
Interest
Total
2023
$
600,000
$
345,465
$
945,465
2024
630,000
330,550
960,550
2025
650,000
313,040
963,040
2026
11,225,000
295,095
11,520,095
Total
$
13,105,000
$
1,284,150
$
14,389,150
Debt Authorization
In 2002, the majority of the qualified electors of the District authorized the issuance of general obligation
indebtedness in the amount not to exceed $28,200,000 for providing public improvements.
As of
December 31, 2022, the District has $11,708,387 of authorization remaining.
In the future, the District
may issue a portion or all of the remaining authorized, but unissued general obligation debt for purposes
of providing public improvements to support development as it occurs within the District's service area.
However, the amount and timing of any debt issuances, if any, are not determinable.
Tallgrass Metropolitan District
NOTES TO FINANCIAL STATEMENTS
December 31, 2022
-14-
NOTE E – FUND BALANCE/NET POSITION
The District utilizes the fund balance presentation as required under GASB Statement No. 54,
Fund
Balance Reporting and Governmental Fund Type Definitions.
Fund balances are categorized as non-
spendable, restricted, committed, assigned or unassigned.
Non-spendable
– represents amounts that cannot be spent because they are either in
non-spendable form or legally required to remain intact,
Restricted
– represents amounts with external constraints placed on the use of these
resources or imposed by enabling legislation,
Committed
– represents amounts that can only be used for specific purposes imposed by
a formal action of the District’s highest level of decision-making authority, the District’s
Board of Directors.
Committed resources cannot be used for any other purpose unless
the District’s Board of Directors removes or changes the specific use by the same type of
action used to commit those amounts, either by resolution or by ordinance,
Assigned
– represents amounts that the District intends to use for specific purposes as
expressed by the District’s Board of Directors or a District official delegated the authority
to assign amounts,
Unassigned
– represents the residual classification for the general fund or deficit
balances in other funds, as applicable.
Amounts are considered to have been spent when an expenditure is incurred for purposes for which both
restricted and unrestricted (committed, assigned, or unassigned) amounts are available.
Unrestricted
amounts are considered to have been spent when an expenditure is incurred for purposes for which
amounts in any of these unrestricted fund balances classifications could be used.
As of December 31, 2022, the District’s fund balance consisted of the following:
General
Fund
Debt Service
Fund
Total
Fund balance
Nonspendable
Prepaid expenses
$
495
$
-
$
495
Restricted
TABOR
1,100
-
1,100
Debt service
-
585,009
585,009
Unassigned
293,428
-
293,428
Total fund balance
$
295,023
$
585,009
$
880,032
Tallgrass Metropolitan District
NOTES TO FINANCIAL STATEMENTS
December 31, 2022
-15-
NOTE E – FUND BALANCE/NET POSITION –
continued
Net Position
The District's net position represents the difference between the District's assets, liabilities, and deferred
inflows of resources. The District may report three categories of net position, as follows:
Restricted net position – net position is considered restricted if its use is constrained to a particular
purpose. Restrictions are imposed by external organizations such as federal or state laws. Restricted
net position is reduced by liabilities and deferred inflows of resources related to the restricted assets.
Unrestricted net position – consists of all other net position that does not meet the definition of the
above two components and is available for general use by the District.
When an expense is incurred for purposes for which both restricted and unrestricted net positions are
available, the District will use the most restrictive net position first.
NOTE F – TAX, SPENDING AND DEBT LIMITATIONS
Article X, Section 20 of the Colorado Constitution, commonly known as the Taxpayer’s Bill of Rights
(“TABOR”), contains tax, spending and debt limitations which apply to the State of Colorado and all local
governments.
TABOR requires local governments to establish emergency reserves.
These reserves must be at least
3% of fiscal year spending (excluding bonded debt service).
Local governments are not allowed to use
the emergency reserves to compensate for economic conditions, revenue shortfalls, or salary or benefit
increases.
The District’s management believes it is in compliance with the provisions of TABOR.
However, TABOR
is complex and subject to interpretation.
Many of the provisions, including the calculation of the fiscal
year spending limits will require judicial interpretation.
NOTE G – RISK MANAGEMENT
The District is exposed to various risks of loss related to torts, theft, damage to, or destruction of assets;
errors or omissions; injuries to volunteers; or acts of God for which the District carries commercial
insurance.
The District’s claims, if any, have not exceeded its coverage during the preceding three years.
NOTE H – COMMITMENTS
District Management
The District outsources the management of the District which includes overall management, accounting
and administrative services.
The service contract renews annually each year on January 1, unless notice
of non-renewal is provided by either party as described in the service contract.
Under the service
contract, the monthly fee for services is not to exceed $1,280.
Tallgrass Metropolitan District
NOTES TO FINANCIAL STATEMENTS
December 31, 2022
-16-
NOTE I – RECONCILIATION OF GOVERNMENTAL FUND AND GOVERNMENT-WIDE FINANCIAL
STATEMENTS
The Governmental Funds Balance Sheet/Statement of Net Position includes an adjustments column
which reconciles the differences between the government-wide and fund financial statements as follows:
Long-term liabilities such as the note payable and the
associated accrued interest payable are not due and
payable in the current period and, therefore, are not
reflected in the governmental funds.
Note payable
$
13,105,000
Accrued interest payable
29,340
The
Statements
of
Governmental
Funds
Revenues,
Expenditures
and
Changes
in
Fund
Balance/Statement of Net Activities includes an adjustment column which reconciles the differences
between the government-wide and fund financial statements as follows:
The
principal
repayments
of
long-term
liabilities
consume the current resources of the governmental
funds,
$
580,000
Changes in other expenses reported in the Statement of
Activities such as accrued interest on the note payable
do not require the use of current financial resources
and, therefore are not reflected in the governmental
funds.
(1,298)
NOTE J – MANAGEMENT’S EVALUATION OF SUBSEQUENT EVENTS
The preparation of the District’s financial statements and accompanying footnotes in conformity with US
GAAP requires District management to evaluate transactions and events subsequent to the balance
sheet date involving the District. Management has evaluated the subsequent transactions and events of
the District through September 18, 2023 which is the date that the financial statements and
accompanying notes were available for issuance.
SUPPLEMENTAL INFORMATION
-18-
Original
Budget
Actual
Variance
Revenue
Property taxes
923,659
$
923,628
$
(31)
$
Specific ownership taxes
55,420
58,312
2,892
Interest
5,000
14,566
9,566
Total revenues
984,079
996,506
12,427
Expenditures
Operating
Bank fees
50
-
50
Legal
3,000
-
3,000
Treasurer's fee
13,855
13,859
(4)
Debt service
Principal payments
580,000
580,000
-
Interest expense
360,752
360,752
-
Total expenditures
957,657
954,611
3,046
Change in Fund Balance
26,422
$
41,895
15,473
$
Fund Balance
Beginning of the year
543,114
End of the year
585,009
$
Tallgrass Metropolitan District
SCHEDULE OF REVENUE, EXPENDITURES AND CHANGE IN FUND BALANCE
BUDGET AND ACTUAL - DEBT SERVICE FUND
For the Year ended December 31, 2022